ADVENT TECHNOLOGIES HOLDINGS, INC.
Risk Factors Relating to Our Operations and Business
We may be unable to adequately control the costs associated
with our operations.
We will require significant capital to develop
and grow our business, including developing and manufacturing our fuel cells and building Advent’s brand. We expect to incur significant
expenses which will impact our profitability, including research and development expenses, raw material procurement costs, sales and
distribution expenses as we build Advent’s brand and market our fuel cells, and general and administrative expenses as we scale
our operations. Our ability to become profitable in the future will not only depend on our ability to successfully market our fuel cells
and other products and services, but also to control our costs. If we are unable to cost efficiently design, manufacture, market, sell,
distribute and service our fuel cells, our margins, profitability and prospects would be materially and adversely affected.
We may need to raise additional funds and these funds may not
be available to us when we need them. If we cannot raise additional funds when we need them, our operations and prospects could be negatively
affected.
The scale-up of production of our fuel cells,
membranes and electrodes, together with the associated investment in our assembly line and product development activities, will consume
capital. While we expect that we will have sufficient capital to fund our planned operations through to breakeven, we may need to raise
additional funds through the issuance of equity, equity related or debt securities, or through obtaining credit from government or financial
institutions. This capital will be necessary to fund our ongoing operations, continue research, development and design efforts, improve
infrastructure, and introduce new technologies. We cannot be certain that additional funds will be available to us on favorable terms
when required, or at all. If we cannot raise additional funds when we need them, our financial condition, results of operations, business
and prospects could be materially adversely affected.
If we fail to manage our future growth effectively, we may not
be able to market and sell our fuel cells and related technologies successfully.
Any failure to manage our growth effectively could
materially and adversely affect our business, prospects, operating results and financial condition. We intend to expand our operations
significantly. Our future expansion will include:
| ● | forecasting
production and revenue; |
| ● | controlling
expenses and investments in anticipation of expanded operations; |
| ● | entry
into new material contracts; |
| ● | establishing
or expanding design, production, licensing and sales; and |
| ● | implementing
and enhancing administrative infrastructure, systems and processes. |
We intend to hire additional personnel, including
design and production personnel. Because our technologies are different from traditional electric vehicle battery technology, individuals
with sufficient training in alternative fuel and electric vehicles may not be available to hire, and as a result, we will need to expend
significant time and expense training the employees we do hire. Competition for individuals with experience designing and manufacturing
hydrogen fuel cells is high, and we may not be able to attract, integrate, train, motivate or retain additional highly qualified personnel
in the future. The failure to attract, integrate, train, motivate and retain these additional employees could seriously harm our business
and prospects.
We will rely on complex machinery for our operations and production
involves a significant degree of risk and uncertainty in terms of operational performance and costs.
We will rely heavily on complex machinery for
our operations and our production will involve a significant degree of uncertainty and risk in terms of operational performance and costs.
Our membrane and fuel cell production plant will consist of large-scale machinery combining many components. The production plant components
are likely to suffer unexpected malfunctions from time to time and will depend on repairs and spare parts to resume operations, which
may not be available when needed. Unexpected malfunctions of the production plant components may significantly affect the intended operational
efficiency. Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control,
such as, but not limited to, scarcity of natural resources, environmental hazards and remediation, costs associated with decommissioning
of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems,
industrial accidents, fire, and seismic activity and natural disasters. Should operational risks materialize, it may result in the personal
injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, monetary losses, delays and unanticipated
fluctuations in production, environmental damage, administrative fines, increased insurance costs and potential legal liabilities, all
which could have a material adverse effect on our business, results of operations, cash flows, financial condition or prospects.
Our future growth is dependent upon the market’s willingness
to adopt our hydrogen-powered fuel cell and membrane technology.
Our growth is highly dependent upon
the adoption by the automotive, aerospace, power and energy industries. If the market for our fuel cells and membranes does not develop
at the rate or to the extent that we expect, our business, prospects, financial condition and operating results will be harmed. The market
for alternative fuel and energy storage systems is still new and is characterized by rapidly changing technologies, price competition,
numerous competitors, evolving government regulation and industry standards and uncertain customer demands and behaviors.
Factors that may influence the adoption
of our fuel cell and membrane technology include:
| ● | perceptions
about safety, design, performance and cost, especially if adverse events or accidents occur
that are linked to the quality or safety of alternative fuel or electric vehicles; |
| ● | improvements
in the fuel economy of internal combustion engines and battery powered vehicles; |
| ● | the
availability of service for alternative fuel vehicles; |
| ● | volatility
in the cost of energy, oil, gasoline and hydrogen; |
| ● | government
regulations and economic incentives promoting fuel efficiency, alternate forms of energy,
and regulations banning internal combustion engines; |
| ● | the
availability of tax and other governmental incentives to sell hydrogen; |
| ● | volatility
in the cost of energy, oil, gasoline and hydrogen; |
| ● | government
regulations and economic incentives promoting fuel efficiency, alternate forms of energy,
and regulations banning internal combustion engines; |
| ● | the
availability of tax and other governmental incentives to sell hydrogen; |
| ● | perceptions
about and the actual cost of alternative fuel; and |
We Continue to Generate a Low Level of Revenue from our core
products MEA, Fuel Cell Systems and Developing Commercial Sales to Major Organizations.
The Company’s current revenue is derived
from the sale of fuel cell systems, and the sale of MEAs, membranes, and electrodes for specific applications
in the fuel cell and energy storage (flow battery) markets. Based on conversations with existing customers and incoming inquiries from
new customers, we anticipate substantial increased demand for our MEAs from a wide range of customers as we scale up our production facilities
and testing capabilities, and as the awareness our MEA capabilities become widely known in the industry. We expect both its existing
customers to increase order volume, and to generate substantial new orders from major organizations, with some of whom it is already
in discussions regarding prospective commercial partnerships and joint development agreements. As of December 31, 2021, we were still
generating a low level of revenues compared to our future projections and have not made any commercial sales to major organizations.
Future product recalls could materially adversely affect our
business, prospects, operating results and financial condition.
Any product recall in the future may result in
adverse publicity, damage our brand and materially adversely affect our business, prospects, operating results and financial condition.
In the future, we may voluntarily or involuntarily, initiate a recall if any of our fuel cells or membranes prove to be defective. Such
recalls involve significant expense and diversion of management attention and other resources, which could adversely affect our brand
image in our target markets, as well as our business, prospects, financial condition and results of operations.
If we are unable to attract and retain key employees and hire
qualified management, technical and fuel cell and system engineering personnel, our ability to compete could be harmed.
Our success depends, in part, on our ability to
retain our key personnel. The unexpected loss of or failure to retain one or more of our key employees could adversely affect our business.
Our success also depends, in part, on our continuing ability to identify, hire, attract, train and develop other highly qualified personnel.
Competition for these employees can be intense,
and our ability to hire, attract and retain them depends on our ability to provide competitive compensation. We may not be able to attract,
assimilate, develop or retain qualified personnel in the future, and our failure to do so could adversely affect our business, including
the execution of our global business strategy. Any failure by our management team to perform as expected may have a material adverse
effect on our business, prospects, financial condition and results of operations.
We have been, and may in the future be, adversely affected by
the global COVID-19 pandemic.
We face various risks related to epidemics, pandemics,
and other outbreaks, including the recent COVID-19 pandemic. The impact of COVID-19, including changes in consumer and business behavior,
pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the
global economy and led to reduced economic activity. The spread of COVID-19 has also impacted our potential customers and suppliers by
disrupting the manufacturing, delivery and overall supply chain of fuel cell manufacturers and suppliers.
Actions taken around the world to help mitigate
the spread of COVID-19 include restrictions on travel, quarantines in certain areas and forced closures for certain types of public places
and businesses. COVID-19 and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on
the economies and financial markets of many countries, including the geographical area in which Advent operates. For example, in May
2021, Advent’s research and development activities in Boston were limited by the restrictions imposed on laboratory work in the
U.S., with laboratories being run at approximately 25% occupancy, with the result that certain business development activities have moved
more slowly. Additionally, in Patras, Greece, approximately half of the Company’s workforce have worked from home during the temporary
lockdowns imposed by the Greek authorities, although these have largely been in support functions. These measures limit operations in
our U.S. and Greece locations and have and may continue to adversely impact our employees, research and development activities and operations
and the operations of our suppliers, vendors and business partners, and may negatively impact our sales and marketing activities. We
may take further actions as may be required by government authorities or that we determine are in the best interests of our employees,
suppliers, vendors and business partners.
The extent to which the COVID-19 pandemic continues
to impact our business, prospects and results of operations will depend on future developments, which are highly uncertain and cannot
be predicted, including the duration and spread of the pandemic, its severity, the actions to contain the virus or treat its impact,
and how quickly and to what extent normal economic and operating activities can resume. Even after the COVID-19 pandemic has subsided,
we may continue to experience an adverse impact to our business as a result of the global economic impact, including any recession that
has occurred or may occur in the future.
There are no comparable recent events that may
provide guidance as to the effect of the spread of COVID-19 and a pandemic, and, as a result, the ultimate impact of the COVID-19 pandemic
or a similar health epidemic is highly uncertain.
Increases in costs, disruption of supply or shortage of raw
materials could harm our business.
Once we increase production, we may experience
increases in the cost or a sustained interruption in the supply or shortage of raw materials. Any such increase or supply interruption
could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials including
precious group metals such as platinum; carbon black; polymer precursors, reactants, and solvents; as well as carbon cloth and carbon
fiber paper. The prices for these raw materials fluctuate depending on market conditions and global demand and could adversely affect
our business and operating results.
We are or may be subject to risks associated with strategic
alliances or acquisitions.
We have entered into, and may in the future enter
into additional, strategic alliances, including joint ventures or minority equity investments with various third parties to further our
business purpose. These alliances could subject us to a number of risks, including risks associated with sharing proprietary information,
non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely
affect our business. We may have limited ability to monitor or control the actions of these third parties and, to the extent any of these
strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, we may also suffer
negative publicity or harm to our reputation by virtue of our association with any such third party.
When appropriate opportunities arise, we may acquire
additional assets, products, technologies or businesses that are complementary to our existing business. In addition to possible stockholder
approval, we may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable
laws and regulations, which could result in increased delay and costs, and may disrupt our business strategy if we fail to do so. Furthermore,
acquisitions and the subsequent integration of new assets and businesses into our own require significant attention from our management
and could result in a diversion of resources from our existing business, which in turn could have an adverse effect on our operations.
Acquired assets or businesses may not generate the financial results we expect. Acquisitions could result in the use of substantial amounts
of cash, potentially dilutive issuances of equity securities and exposure to potential unknown liabilities of the acquired business.
Moreover, the costs of identifying and consummating acquisitions may be significant.
We may experience difficulties integrating
the operations of acquired companies into our business and in realizing the expected benefits of these acquisitions.
We completed the acquisition of SerEnergy
and FES on August 31, 2021. Acquisitions involve numerous risks, any of which could harm our business and negatively affect our financial
condition and results of operations. The success of our acquisition of FES and SerEnergy will depend in part on our ability to realize
the anticipated business opportunities from combining their and our operations in an efficient and effective manner. These integration
processes could take longer than anticipated and could result in the loss of key employees, the disruption of each company’s ongoing
businesses, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies,
any of which could adversely affect our ability to maintain relationships with customers, employees or other third parties, or our ability
to achieve the anticipated benefits of the acquisitions, and could harm our financial performance. If we are unable to successfully or
timely integrate the operations of FES and SerEnergy with our business, we may incur unanticipated liabilities and be unable to realize
the revenue growth, synergies and other anticipated benefits resulting from the acquisitions, or fully offset the costs of the acquisition,
and our business, results of operations and financial condition could be materially and adversely affected.
We are subject to substantial regulation and unfavorable changes
to, or failure by us to comply with, these regulations could substantially harm our business and operating results.
Our fuel cells and membranes are subject to substantial
regulation under international, federal, state, and local laws. We expect to incur significant costs in complying with these regulations.
Regulations related to alternative energy are currently evolving and we face risks associated with changes to these regulations, including
but not limited to:
| ● | increased
subsidies for corn and ethanol production, which could reduce the operating cost of vehicles
that use ethanol or a combination of ethanol and gasoline; and |
| ● | increased
sensitivity by regulators to the needs of established automobile manufacturers with large
employment bases, high fixed costs and business models based on the internal combustion engine,
which could lead them to pass regulations that could reduce the compliance costs of such
established manufacturers or mitigate the effects of government efforts to promote alternative
fuel vehicles. Compliance with changing regulations could be burdensome, time consuming,
and expensive. To the extent compliance with new regulations is cost prohibitive, our business,
prospects, financial condition and operating results would be adversely affected. |
We face risks associated with our international operations,
including unfavorable regulatory, political, tax and labor conditions, which could harm our business.
We face risks associated with our international
operations, including possible unfavorable regulatory, political, tax and labor conditions, which could harm our business. We have international
operations that are subject to the legal, political, regulatory and social requirements and economic conditions in these jurisdictions.
We are subject to a number of risks associated with international business activities that may increase our costs, impact our ability
to sell our fuel cells and membranes and require significant management attention. These risks include:
| ● | difficulty
in staffing and managing foreign operations; |
| ● | foreign
government taxes, regulations and permit requirements, including foreign taxes that we may
not be able to offset against taxes imposed upon us in the U.S., and foreign tax and other
laws limiting our ability to repatriate funds to the U.S.; |
| ● | fluctuations
in foreign currency exchange rates and interest rates; |
| ● | U.S.
and foreign government trade restrictions, tariffs and price or exchange controls; |
| ● | foreign
labor laws, regulations and restrictions; |
| ● | changes
in diplomatic and trade relationships; |
| ● | political
instability, natural disasters, war or events of terrorism; and |
| ● | the
strength of international economies. |
If we fail to successfully address these risks,
our business, prospects, operating results and financial condition could be materially harmed.
The unavailability, reduction or elimination of government and
economic incentives could have a material adverse effect on our business, prospects, financial condition and operating results.
Any reduction, elimination or discriminatory application
of government subsidies and economic incentives because of policy changes, the reduced need for such subsidies and incentives due to
the perceived success of alternative energies or other reasons may result in the diminished competitiveness of the alternative fuel industry
generally. This could materially and adversely affect the growth of the alternative fuel automotive markets and our business, prospects,
financial condition and operating results.
While certain tax credits and other incentives
for alternative energy production and alternative fuel vehicles have been available in the past, there is no guarantee these programs
will be available in the future. If current tax incentives are not available in the future, our financial position could be harmed.
We may not be able to obtain or agree on acceptable terms and
conditions for all or a significant portion of the government grants, loans and other incentives for which we may apply in the future.
As a result, our business and prospects may be adversely affected.
We anticipate continuing to apply for federal
and state grants, loans and tax incentives under government programs designed to stimulate the economy and support the production of
alternative fuel vehicles and related technologies. We anticipate that in the future there will be new opportunities for us to apply
for grants, loans and other incentives from the U.S., state and foreign governments. Our ability to obtain funds or incentives from government
sources is subject to the availability of funds under applicable government programs and approval of our applications to participate
in such programs. The application process for these funds and other incentives will likely be highly competitive. We cannot assure you
that we will be successful in obtaining any of these additional grants, loans and other incentives. If we are not successful in obtaining
any of these additional incentives and we are unable to find alternative sources of funding to meet our planned capital needs, our business
and prospects could be materially adversely affected.
We may need to defend ourselves against patent or trademark
infringement claims, which may be time-consuming and cause us to incur substantial costs.
Companies, organizations or individuals, including
our competitors, may own or obtain patents, trademarks or other proprietary rights that would prevent or limit our ability to make, use,
develop, license or sell our fuel cell and membrane technologies, which could make it more difficult for us to operate our business.
We may receive inquiries from patent or trademark owners inquiring whether we infringe their proprietary rights. Companies owning patents
or other intellectual property rights relating to fuel cells may allege infringement of such rights. In response to a determination that
we have infringed upon a third party’s intellectual property rights, we may be required to do one or more of the following:
| ● | cease
development, sales, license or use of fuel cells or membranes that incorporate the asserted
intellectual property; |
| ● | pay
substantial damages; |
| ● | obtain
a license from the owner of the asserted intellectual property right, which license may not
be available on reasonable terms or at all; or |
| ● | redesign
one or more aspects or systems of our fuel cells or membranes. |
A successful claim of infringement against us
could materially adversely affect our business, prospects, operating results and financial condition. Any litigation or claims, whether
valid or invalid, could result in substantial costs and diversion of resources.
We also plan to license patents and other intellectual
property from third parties and we may face claims that our use of this in-licensed technology infringes the intellectual property rights
of others. In such cases, we will seek indemnification from our licensors. However, our rights to indemnification may be unavailable
or insufficient to cover our costs and losses.
Our business may be adversely affected if we are unable to protect
our intellectual property rights from unauthorized use by third parties.
Failure to adequately protect our intellectual
property rights could result in our competitors offering similar products, potentially resulting in the loss of some of our competitive
advantage and a decrease in our revenue, which would adversely affect our business, prospects, financial condition and operating results.
Our success depends, at least in part, on our ability to protect our core technology and intellectual property. To accomplish this, we
will rely on a combination of patents, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyright,
trademarks, intellectual property licenses and other contractual rights to establish and protect our rights in our technology.
The protection of our intellectual property rights
will be important to our future business opportunities. However, the measures we take to protect our intellectual property from unauthorized
use by others may not be effective for various reasons, including the following:
| ● | any
patent applications we submit may not result in the issuance of patents; |
| ● | the
scope of our issued patents may not be broad enough to protect our proprietary rights; |
| ● | our
issued patents may be challenged and/or invalidated by our competitors; |
| ● | the
costs associated with enforcing patents, confidentiality and invention agreements or other
intellectual property rights may make aggressive enforcement impracticable; |
| ● | current
and future competitors may circumvent our patents; and |
| ● | our
in-licensed patents may be invalidated, or the owners of these patents may breach our license
arrangements. |
Patent, trademark, and trade secret laws vary
significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws
of the U.S. Further, policing the unauthorized use of our intellectual property in foreign jurisdictions may be difficult. Therefore,
our intellectual property rights may not be as strong or as easily enforced outside of the U.S.
Our patent applications may not issue as patents, which may
have a material adverse effect on our ability to prevent others from commercially exploiting products similar to ours.
We cannot be certain that we are the first inventor
of the subject matter to which we have filed a particular patent application, or if we are the first party to file such a patent application.
If another party has filed a patent application to the same subject matter as we have, we may not be entitled to the protection sought
by the patent application. Further, the scope of protection of issued patent claims is often difficult to determine. As a result, we
cannot be certain that the patent applications that we file will issue, or that our issued patents will afford protection against competitors
with similar technology. In addition, our competitors may design around our issued patents, which may adversely affect our business,
prospects, financial condition or operating results.
Our management team has limited experience managing a public
company.
Most members of our management team have limited
experience managing a publicly-traded company, interacting with public company investors and complying with the increasingly complex
laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public
company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the scrutiny of securities
analysts and investors. These new obligations and constituents will require significant attention from our management team and could
divert their attention away from the day-to-day management of our business, which could materially and adversely affect our business,
financial condition, operating results, cash flows and prospects.
The SEC released a public statement regarding accounting for
warrants which resulted in our warrants being accounted for as liabilities rather than as equity and a restatement of our previously
issued financial statements.
On April 12, 2021, the staff of the SEC issued
a public statement entitled "Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition
Companies ("SPACs") (the "Statement"). In the Statement, the SEC staff expressed its view that certain terms and
conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC's balance sheet as opposed to
equity. Since issuance, our warrants were accounted for as equity within our balance sheet, and after discussion and evaluation, including
with our independent auditors, we have concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement.
Therefore, we conducted a valuation of our warrants and restated our previously issued financial statements, which resulted in unanticipated
costs and diversion of management resources and may result in potential loss of investor confidence. Although we have now completed the
restatement, we cannot guarantee that we will have no further inquiries from the SEC or Nasdaq regarding our restated financial statements
or matters relating thereto. Any future inquiries from the SEC or Nasdaq as a result of the restatement of our historical financial statements
will, regardless of the outcome, likely consume a significant amount of our resources in addition to those resources already consumed
in connection with the restatement itself.
The restatement of the Company's financial statements in May
2021 has subjected us to additional risks and uncertainties, including increased professional costs and the increased possibility of
legal proceedings.
As a result of the restatement of our financial
statements discussed above, we have become subject to additional risks and uncertainties, including, among others, increased professional
fees and expenses and time commitment that may be required to address matters related to the restatement, and scrutiny of the SEC and
other regulatory bodies which could cause investors to lose confidence in the Company's reported financial information and could subject
the Company to civil or criminal penalties or shareholder litigation. We could face monetary judgments, penalties or other sanctions
that could have a material adverse effect on the Company's business, financial condition and results of operations and could cause its
stock price to decline.
Certain of our warrants are accounted for as a warrant liability
and are recorded at fair value upon issuance with changes in fair value each period to be reported in earnings, which may have an adverse
effect on the market price of our common stock.
Following the restatement of our historical financial
statements, we account for our warrants as a warrant liability and recorded at fair value upon issuance any changes in fair value each
period reported in earnings as determined by the Company based upon a valuation report obtained from its independent third party valuation
firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.
Obtaining the MIL-STD certification for the Honey Badger and
advancing it for U.S. army integration is subject to risks and uncertainty.
Obtaining the MIL-STD certification for the Honey
Badger and advancing it for U.S. army integration is subject to risks and uncertainty, and may not be completed on the timeline the Company
expects, or at all.
Cybersecurity risks and attacks, security incidents, and data
breaches could compromise our intellectual property or other proprietary information, could disrupt our electronic infrastructure, operations
and manufacturing, and could impact our competitive position, reputation, results of operations, financial condition, and cash flows.
We rely upon the information technology and data
security infrastructure and its capacity, reliability, and security in connection with various aspects of our business activities. We
also rely on our ability to expand and continually update these technologies and related infrastructure in response to the changing needs
of our business. We face challenges related to supporting our older technologies and implementing necessary upgrades and the hardening
of current technologies. In addition, some of these technologies are managed by third-party service providers and are not under our direct
control. If we experience a problem with a critical technology, including during upgrades or new technology implementations, any resulting
disruptions could have an adverse effect on our business operations and our performance.
Our business operations rely upon our electronic
infrastructure and that of our third-party vendors, including to handle information and data such as intellectual property, personal
information, protected information, financial information and other confidential and proprietary information related to our business
and our employees, prospects, customers, suppliers and other business partners. While we maintain certain administrative, technical,
and physical safeguards and take preventive and proactive measures to combat known and unknown cybersecurity risks, we currently are
building out and maturing our electronic infrastructure and safeguards. There is no assurance that our current controls and our ongoing
efforts will be sufficient to eliminate security risks.
Cyberattacks are increasing in frequency and evolving
in nature. We and our third-party providers are at risk of attack through use of increasingly sophisticated methods, including malware,
phishing, ransomware, and the deployment of technologies to find and exploit vulnerabilities. Our electronic infrastructure, and information
technology systems maintained by our third-party providers, have been in the past, and may be in the future, subjected to attempts to
gain unauthorized access, disable, destroy, maliciously control or cause other business disruptions. In some cases, it is difficult to
anticipate or to detect immediately such incidents and any damage caused. While these types of incidents have not had a material impact
on our business to-date, future incidents involving access to or improper use of our systems, or those of our third-parties, could compromise
confidential, proprietary or otherwise sensitive information.
In addition, cyberattacks could negatively impact
our reputation and our competitive position and could result in litigation with third parties, regulatory action, significant remediation
costs, and loss of business and customers relationships, any of which could adversely impact our business, our financial condition, and
our operating results. Although we maintain some insurance coverage, we cannot be certain that coverage would apply to cyber risks, that
it may be adequate for liabilities incurred, or that any insurer will not accept or deny coverage of future claims.
We may experience problems with the operation
of our electronic infrastructure or the technology systems of third parties on which we rely, as well as the development and deployment
of new electronic infrastructure, that could adversely affect, or even disrupt, all or a portion of our operations until resolved. In
addition, as a result of the COVID-19 pandemic a large percentage of our salaried employees continue to work remotely full or part-time.
This remote working environment may pose a heightened risk for security breaches or other disruptions of our information technology environment.
Our global operations are subject to data privacy laws and regulations
that impose significant compliance costs and create reputational and legal risk.
Due to the international scope of our operations,
we may be subject to a complex system of regulatory requirements regarding data privacy, such as the European Union General Data Protection
Regulation and California’s Consumer Privacy Act and its amendments.
Our numerous foreign operations
are governed by laws, rules and business practices that differ from those of the U.S. We cannot predict now our future data privacy risks
or the nature, scope or effect of future regulatory requirements to which our operations might be subject or the manner in which existing
laws might be administered or interpreted.
A write-off of all or part of our goodwill
or other intangible assets could adversely affect our operating results and net worth.
Goodwill
and other intangible assets are a component of our assets. As a part of our acquisition of SerEnergy and FES on August 31, 2021, we recognized
$29.4 million in goodwill and $19.8 million in other intangible assets. As of December 31, 2021, goodwill was $30.0 million and other
intangible assets were $23.3 million of our total assets of $163.0 million. We may have to write off all or part of our goodwill or other
intangible assets if their value becomes impaired. Although this write-off would be a non-cash charge, it could reduce our earnings and
our financial condition.
We face risks associated with our international
operations, including unfavorable regulatory, political, tax and labor conditions, which could harm our business.
We face risks associated with
our international operations, including possible unfavorable regulatory, political, tax and labor conditions, which could harm our business.
We have international operations in Europe and Asia that are subject to the legal, political, regulatory and social requirements and
economic conditions in these jurisdictions. We are subject to a number of risks associated with international business activities that
may increase our costs, impact our ability to sell our fuel cells and membranes and require significant management attention. These risks
include:
| ● | difficulty
in staffing and managing foreign operations; |
| | |
| ● | foreign
government taxes, regulations and permit requirements, including foreign taxes that we may
not be able to offset against taxes imposed upon us in the U.S., and foreign tax and other
laws limiting our ability to repatriate funds to the U.S.; |
| | |
| ● | fluctuations
in foreign currency exchange rates and interest rates; |
| | |
| ● | increased
inflation rates and cost of goods; |
| | |
| ● | U.S.
and foreign government trade restrictions, tariffs and price or exchange controls; |
| | |
| ● | foreign
labor laws, regulations and restrictions; |
| | |
| ● | changes
in diplomatic and trade relationships; |
| | |
| ● | political
instability, natural disasters, war, or events of terrorism; |
| | |
| ● | the
escalation or continuation of armed conflict, hostilities or economic sanctions between countries
or regions, including the current conflict between Russia and Ukraine; |
| | |
| ● | the
strength of international economies and economic relations between countries or regions;
and |
| | |
| ● | economic
uncertainties and potential disruptions include a slow-down in the general economy. |
If we fail to successfully address
these risks, our business, prospects, operating results and financial condition could be materially harmed.
Risks Related to Ownership of Our Common Stock and Warrants
Delaware law and our second amended and restated certificate
of incorporation and amended and restated bylaws contain certain provisions, including anti-takeover provisions, that limit the ability
of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
Our second amended and restated certificate of
incorporation and our amended and restated bylaws, and the DGCL, contain provisions that could have the effect of rendering more difficult,
delaying, or preventing an acquisition deemed undesirable by our board of directors and therefore depress the trading price of our common
stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors or taking
other corporate actions, including effecting changes in our management. Among other things, our second amended and restated certificate
of incorporation and amended and restated bylaws include provisions regarding:
| ● | a
classified board of directors with three-year staggered terms, which could delay the ability
of stockholders to change the membership of a majority of our board of directors; |
| ● | the
ability of our board of directors to issue shares of preferred stock, including “blank
check” preferred stock and to determine the price and other terms of those shares,
including preferences and voting rights, without stockholder approval, which could be used
to significantly dilute the ownership of a hostile acquirer; |
| ● | the
limitation of the liability of, and the indemnification of, our directors and officers; |
| ● | the
exclusive right of our board of directors to elect a director to fill a vacancy created by
the expansion of our board of directors or the resignation, death or removal of a director,
which prevents stockholders from being able to fill vacancies on our board of directors; |
| ● | the
requirement that directors may only be removed from our board of directors for cause; |
| ● | a
prohibition on stockholder action by written consent, which forces stockholder action to
be taken at an annual or special meeting of stockholders and could delay the ability of stockholders
to force consideration of a stockholder proposal or to take action, including the removal
of directors; |
| ● | the
requirement that a special meeting of stockholders may be called only by our board of directors,
the chairperson of our board of directors, our chief executive officer or our president (in
the absence of a chief executive officer), which could delay the ability of stockholders
to force consideration of a proposal or to take action, including the removal of directors; |
| ● | controlling
the procedures for the conduct and scheduling of board of directors and stockholder meetings; |
| ● | the
requirement for the affirmative vote of holders of at least 65% of the voting power of all
of the then outstanding shares of the voting stock, voting together as a single class, to
amend, alter, change or repeal any provision of the second amended and restated certificate
of incorporation or amended and restated bylaws, which could preclude stockholders from bringing
matters before annual or special meetings of stockholders and delay changes in our board
of directors and also may inhibit the ability of an acquirer to effect such amendments to
facilitate an unsolicited takeover attempt; |
| ● | the
ability of our board of directors to amend the amended and restated bylaws, which may allow
our board of directors to take additional actions to prevent an unsolicited takeover and
inhibit the ability of an acquirer to amend the amended and restated bylaws to facilitate
an unsolicited takeover attempt; and |
| ● | advance
notice procedures with which stockholders must comply to nominate candidates to our board
of directors or to propose matters to be acted upon at a stockholders’ meeting, which
could preclude stockholders from bringing matters before annual or special meetings of stockholders
and delay changes in our board of directors and also may discourage or deter a potential
acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate
of directors or otherwise attempting to obtain control of surviving entity. |
These provisions, alone or together, could delay
or prevent hostile takeovers and changes in control or changes in our board of directors or management.
In addition, as a Delaware corporation, we will
be subject to provisions of Delaware law, including Section 203 of the DGCL, which may generally prohibit certain stockholders holding
15% or more of our outstanding capital stock from engaging in certain business combinations with us for a specified period of time unless
certain conditions are met.
Any provision of the second amended and restated
certificate of incorporation, amended and restated bylaws or Delaware law that has the effect of delaying or preventing a change in control
could limit the opportunity for stockholders to receive a premium for their shares of our capital stock and could also affect the price
that some investors are willing to pay for our common stock.
The second amended and restated certificate of incorporation
designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between
us and our stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting
a cause of action arising under the Securities Act, each of which could limit the ability of our stockholders to choose the judicial
forum for disputes with us or our directors, officers, or employees.
The second amended and restated certificate of
incorporation provides that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for
(1) any derivative action or proceeding brought on its behalf, (2) any action asserting a claim of breach of a fiduciary duty owed by
any of its directors, officers, or other employees to us or our stockholders, (3) any action arising pursuant to any provision of the
Delaware General Corporation Law, or the second amended and restated certificate of incorporation or the amended and restated bylaws
or (4) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State
of Delaware (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all
cases subject to the court having jurisdiction over indispensable parties named as defendants. The second amended and restated certificate
of incorporation also provides that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting
a cause of action arising under the Securities Act. The exclusive forum provision is applicable to the fullest extent permitted by applicable
law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce
any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision
will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal
courts have exclusive jurisdiction. We note, however, that there is uncertainty as to whether a court would enforce this provision and
that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities
Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the
Securities Act or the rules and regulations thereunder.
Any person or entity purchasing or otherwise acquiring
any interest in any of our securities shall be deemed to have notice of and consented to this provision. This exclusive-forum provision
may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with us or our directors, officers,
or other employees, which may discourage lawsuits against us and our directors, officers, and other employees. If a court were to find
the exclusive-forum provision be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving
the dispute in other jurisdictions, which could harm its results of operations.
We may be required to take write-downs or write-offs, restructuring
and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and stock
price, which could cause you to lose some or all of your investment.
Although we conducted due diligence on Advent,
we cannot assure you that this diligence revealed all material issues that may be present in Advent’s business, that it would be
possible to uncover all material issues through a customary amount of due diligence, or that factors outside of our control will not
later arise. As a result, the company may be forced to later write-down or write-off assets, restructure our operations, or incur impairment
or other charges that could result in losses. Even if the due diligence successfully identified certain risks, unexpected risks may arise
and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even though these charges may
be non-cash items and not have an immediate impact on our liquidity, the fact that the company reports charges of this nature could contribute
to negative market perceptions about the Company or our securities. Accordingly, our stockholders could suffer a reduction in the value
of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim
that the reduction was due to the breach by our officers or directors of a duty of care or other fiduciary duty owed to them, or if they
are able to successfully bring a private claim under securities laws that the Proxy Statement / Prospectus relating to the business combination
contained an actionable material misstatement or material omission.
An active market for our securities may not develop, which would
adversely affect the liquidity and price of our securities.
The price of our securities may vary significantly
due to factors specific to our business as well as to general market or economic conditions. Furthermore, an active trading market for
our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market
can be established and sustained.
NASDAQ may delist our securities from trading on its exchange,
which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
Our securities are currently listed on Nasdaq.
However, we cannot assure you that our securities will continue to be listed on Nasdaq in the future. In order to continue listing its
securities on Nasdaq, we must meet certain financial and liquidity criteria to maintain such listing. If we violate Nasdaq’s listing
requirements, or if we fail to meet any of Nasdaq’s listing standards, our common stock may be delisted. In addition, our board
of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the benefits of such
listing. A delisting of our common stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our common
stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock. We cannot
assure you that we will be able to meet those initial listing requirements at all times.
If Nasdaq delists our securities from trading
on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be
quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:
| ● | a
limited availability of market quotations for its securities; |
| · | reduced
liquidity for its securities; |
| ● | a
determination that our common stock is a “penny stock” which will require brokers
trading in the common stock to adhere to more stringent rules and possibly result in a reduced
level of trading activity in the secondary trading market for our securities; |
| ● | a
limited amount of news and analyst coverage; and |
| ● | a
decreased ability to issue additional securities or obtain additional financing in the future. |
Our common stock price may change significantly and you could
lose all or part of your investment as a result.
The trading price of our common stock is likely
to be volatile. The stock market recently has experienced extreme volatility. This volatility often has been unrelated or disproportionate
to the operating performance of particular companies. You may not be able to resell your shares of our common stock at an attractive
price due to a number of factors such as those listed in “Risk Factors Relating to Our Operations and Business” and
the following:
| ● | results
of operations that vary from the expectations of securities analysts and investors; |
| ● | results
of operations that vary from our competitors; |
| ● | changes
in expectations as to our future financial performance, including financial estimates and
investment recommendations by securities analysts and investors; |
| ● | declines
in the market prices of stocks generally; |
| ● | strategic
actions by us or our competitors; |
| ● | announcements
by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic
relationships or capital commitments; |
| ● | any
significant change in our management; |
| ● | changes
in general economic or market conditions or trends in our industry or markets; |
| ● | changes
in business or regulatory conditions, including new laws or regulations or new interpretations
of existing laws or regulations applicable to our business; |
| ● | future
sales of our common stock or other securities; |
| ● | investor
perceptions of the investment opportunity associated with our common stock relative to other
investment alternatives; |
| ● | the
public’s response to press releases or other public announcements by us or third parties,
including our filings with the SEC; |
| ● | litigation
involving us, our industry, or both, or investigations by regulators into our operations
or those of our competitors; |
| ● | guidance,
if any, that we provide to the public, any changes in this guidance or our failure to meet
this guidance; |
| ● | the
development and sustainability of an active trading market for our common stock; |
| ● | actions
by institutional or activist stockholders; |
| ● | changes
in accounting standards, policies, guidelines, interpretations or principles; and |
| · | other
events or factors, including those resulting from pandemics, natural disasters, war, acts
of terrorism or responses to these events. |
These broad market and industry fluctuations may
adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility
may be greater if the public float and trading volume of our common stock is low.
In the past, following periods of market volatility,
stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial
cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
Because there are no current plans to pay cash dividends on
our common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock at a price
greater than what you paid for it.
We intend to retain future earnings, if any, for
future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future.
The declaration, amount and payment of any future dividends on shares of common stock will be at the sole discretion of the board of
directors. The board of directors may take into account general and economic conditions, our financial condition and results of operations,
our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions,
implications of the payment of dividends by us to our stockholders or by its subsidiaries to it and such other factors as the board of
directors may deem relevant. As a result, you may not receive any return on an investment in our common stock unless you sell your common
stock for a price greater than that which you paid for it.
Our stockholders may experience dilution in the future.
The percentage of shares of our common stock owned
by current stockholders may be diluted in the future because of equity issuances for acquisitions, capital market transactions or otherwise,
including, without limitation, equity awards that we may grant to its directors, officers and employees, or exercise of warrants. Such
issuances may have a dilutive effect on our earnings per share, which could adversely affect the market price of our common stock.
If securities or industry analysts do not publish research or
reports about our business, if they change their recommendations regarding our common stock or if our operating results do not meet their
expectations, our common stock price and trading volume could decline.
The trading market for our common stock will depend
in part on the research and reports that securities or industry analysts publish about us or our businesses. If no securities or industry
analysts commence coverage of us or our business, the trading price for our common stock could be negatively impacted. In the event securities
or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our securities or publish unfavorable research
about our businesses, or if our operating results do not meet analyst expectations, the trading price of our common stock would likely
decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock
could decrease, which might cause our common stock price and trading volume to decline.
Future sales, or the perception of future sales, by us or our
stockholders in the public market could cause the market price for our common stock to decline.
The sale of shares of our common stock in the
public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These
sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future
at a time and at a price that it deems appropriate.
As of November 30, 2022, we had a total of
51,717,720 shares of our common stock outstanding. All shares held by public stockholders prior to the Business Combination and all of
the shares issued in the Business Combination to former stockholders of Advent Technologies Inc. are
freely tradable without registration under the Securities Act, and without restriction by persons other than our “affiliates”
(as defined under Rule 144 of the Securities Act, “Rule 144”), including our directors, executive officers and other affiliates.
The shares of Advent’s common stock reserved
for future issuance under the 2021 Equity Incentive Plan will become eligible for sale in the public market once those shares are issued,
subject to any applicable vesting requirements, lockup agreements and other restrictions imposed by law. A total of 6,915,892 shares of
common stock have been reserved for future issuance under the 2021 Equity Incentive Plan. We filed a registration statement on Form S-8
on June 10, 2021, which covers the 6,915,892 shares of our common stock reserved under the 2021 Equity Incentive Plan. We may also file
one or more registration statements on Form S-8 under the Securities Act to register shares of our common stock or securities convertible
into or exchangeable for shares of our common stock issued pursuant to any future equity incentive plan that we adopt. Any such Form S-8
registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements
will be available for sale in the open market.
In the future, we may also issue our securities
in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition
could constitute a material portion of the then-outstanding shares of our common stock. Any issuance of additional securities in connection
with investments or acquisitions may result in additional dilution to our stockholders.
As a public company, we are subject to additional laws, regulations
and stock exchange listing standards, which impose additional costs on us and may strain our resources and divert our management’s
attention.
Advent previously operated on a private basis
and following the Business Combination it became a wholly-owned subsidiary of a public company that is subject to the reporting requirements
of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements
of Nasdaq and other applicable securities laws and regulations. Compliance with these laws and regulations will increase our legal and
financial compliance costs and make some activities more difficult, time-consuming or costly, which may strain our resources or divert
management’s attention.
We are an emerging growth company within the meaning of the
Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this
could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company”
within the meaning of the Securities Act, as modified by the JOBS Act. We may continue to take advantage of certain exemptions from various
reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited
to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding
a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
As a result, our stockholders may not have access to certain information they may deem important. We cannot predict whether investors
will find securities issued by us less attractive because we will rely on these exemptions. If some investors find those securities less
attractive as a result of its reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would
be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts
emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that
is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered
under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company
can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. We have elected not to opt out of such extended transition period, which means that when
a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company,
can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our
financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted
out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.
We may redeem unexpired public warrants prior to their exercise
at a time that is disadvantageous for warrant holders.
We will have the ability to redeem outstanding
public warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided
that the last reported sales price of our common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends,
reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day
prior to the date we send the notice of redemption to the warrant holders. If and when the public warrants become redeemable by us, we
may exercise our redemption right when the registration statement to which this prospectus forms a part comes into effect with respect
to the shares of common stock underlying such warrants. Redemption of the outstanding public warrants could force you to: (1) exercise
your warrants and pay the related exercise price at a time when it may be disadvantageous for you to do so; (2) sell your warrants at
the then-current market price when you might otherwise wish to hold your warrants; or (3) accept the nominal redemption price which,
at the time the outstanding public warrants are called for redemption, is likely to be substantially less than the market value of your
warrants. None of the placement warrants or working capital warrants will be redeemable by us for cash so long as they are held by our
sponsor or its permitted transferees.
Changes in accounting standards and subjective assumptions,
estimates and judgments by management related to complex accounting matters could significantly affect our financial condition and results
of operations.
Accounting principles and related pronouncements,
implementation guidelines and interpretations we apply to a wide range of matters that are relevant to our business, including, but not
limited to, revenue recognition, leases and stock-based compensation, are complex and involve subjective assumptions, estimates and judgments
by our management. Changes in accounting pronouncements or their interpretation or changes in underlying assumptions, estimates or judgments
by our management could significantly change our reported or expected financial performance.
The exercise of Warrants for our common stock would increase
the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
As of September 30, 2022, we had Warrants to purchase
an aggregate of 26,369,557 shares of our common stock outstanding. To the extent remaining Warrants are exercised, additional shares
of common stock will be issued, which will result in dilution to the then-existing holders of common stock and increase the number of
shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market or the fact that such
Warrants may be exercised could adversely affect the market price of our common stock.
The valuation of our Warrants could increase the
volatility in our net income (loss) in our consolidated statements of earnings (loss).
The
change in fair value of our Warrants is the result of changes in stock price and Warrants outstanding at each reporting period. The Change
in Fair Value of Warrant Liabilities represents the mark-to-market fair value adjustments to the outstanding Warrants issued in connection
with the initial public offering of ACMI and the concurrent private placement. Significant changes in our stock price or number of Warrants
outstanding may adversely affect our net income (loss) in our consolidated statements of earnings (loss).
PLAN OF DISTRIBUTION
We are registering the issuance by us of up to
an aggregate of 22,029,279 shares of common stock that are issuable upon exercise of the public warrants, 3,940,278 shares of common
stock that are issuable upon exercise of the placement warrants and 400,000 shares of common stock that are issuable upon exercise of
the working capital warrants. We are also registering the offer and sale, from time to time, by the Selling Securityholders of up to
33,363,466 shares of common stock and up to 4,340,278 placement warrants and working capital warrants.
We will not receive any of the proceeds from the
sale of the securities by the Selling Securityholders. The aggregate proceeds to the Selling Securityholders will be the purchase price
of the securities less any discounts and commissions borne by the Selling Securityholders.
The Selling Securityholders will pay any underwriting
discounts and commissions and expenses incurred by the Selling Securityholders for brokerage, accounting, tax or legal services or any
other expenses incurred by the Selling Securityholders in disposing of the securities. We will bear all other costs, fees and expenses
incurred in effecting the registration of the securities covered by this prospectus, including, without limitation, all registration
and filing fees, Nasdaq listing fees and fees and expenses of our counsel and our independent registered public accountants.
The securities beneficially owned by the Selling
Securityholders covered by this prospectus may be offered and sold from time to time by the Selling Securityholders. The term “Selling
Securityholders” includes donees, pledgees, transferees or other successors in interest selling securities received after the date
of this prospectus from a Selling Securityholder as a gift, pledge, partnership distribution or other transfer. The Selling Securityholders
will act independently of us in making decisions with respect to the timing, manner and size of each sale. Such sales may be made on
one or more exchanges or in the over-the-counter market or otherwise, at prices and under terms then prevailing or at prices related
to the then current market price or in negotiated transactions. Each Selling Securityholder reserves the right to accept and, together
with its respective agents, to reject, any proposed purchase of securities to be made directly or through agents. The Selling Securityholders
and any of their permitted transferees may sell their securities offered by this prospectus on any stock exchange, market or trading
facility on which the securities are traded or in private transactions. If underwriters are used in the sale, such underwriters will
acquire the shares for their own account. These sales may be at a fixed price or varying prices, which may be changed, or at market prices
prevailing at the time of sale, at prices relating to prevailing market prices or at negotiated prices. The securities may be offered
to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. The obligations
of the underwriters to purchase the securities will be subject to certain conditions. The underwriters will be obligated to purchase
all the securities offered if any of the securities are purchased.
Subject to the limitations set forth in any applicable
registration rights agreement, the Selling Securityholders may use any one or more of the following methods when selling the securities
offered by this prospectus:
| ● | purchases
by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant
to this prospectus; |
| ● | ordinary
brokerage transactions and transactions in which the broker solicits purchasers; |
| ● | block
trades in which the broker-dealer so engaged will attempt to sell the securities as agent
but may position and resell a portion of the block as principal to facilitate the transaction; |
| ● | an
over-the-counter distribution in accordance with the rules of The Nasdaq Stock Market; |
| ● | through
trading plans entered into by a Selling Securityholder pursuant to Rule 10b5-1 under the
Exchange Act that are in place at the time of an offering pursuant to this prospectus and
any applicable prospectus supplement hereto that provide for periodic sales of their securities
on the basis of parameters described in such trading plans; |
| ● | through
one or more underwritten offerings on a firm commitment or best efforts basis; |
| ● | settlement
of short sales entered into after the date of this prospectus; |
| ● | agreements
with broker-dealers to sell a specified number of the securities at a stipulated price per
share or warrant; |
| ● | in
“at the market” offerings, as defined in Rule 415 under the Securities Act, at
negotiated prices, at prices prevailing at the time of sale or at prices related to such
prevailing market prices, including sales made directly on a national securities exchange
or sales made through a market maker other than on an exchange or other similar offerings
through sales agents; |
| ● | directly
to purchasers, including through a specific bidding, auction or other process or in privately
negotiated transactions; |
| ● | through
the writing or settlement of options or other hedging transactions, whether through an options
exchange or otherwise; |
| ● | through
a combination of any of the above methods of sale; or |
| ● | any
other method permitted pursuant to applicable law. |
In addition, a Selling Securityholder that is
an entity may elect to make a pro rata in-kind distribution of securities to its members, partners or stockholders pursuant to the registration
statement of which this prospectus is a part by delivering a prospectus with a plan of distribution. Such members, partners or stockholders
would thereby receive freely tradeable securities pursuant to the distribution through a registration statement. To the extent a distributee
is an affiliate of ours (or to the extent otherwise required by law), we may file a prospectus supplement in order to permit the distributees
to use the prospectus to resell the securities acquired in the distribution.
There can be no assurance that the Selling Securityholders
will sell all or any of the securities offered by this prospectus. In addition, the Selling Securityholders may also sell securities
under Rule 144 under the Securities Act, if available, or in other transactions exempt from registration, rather than under this prospectus.
The Selling Securityholders have the sole and absolute discretion not to accept any purchase offer or make any sale of securities if
they deem the purchase price to be unsatisfactory at any particular time.
The Selling Securityholders also may transfer
the securities in other circumstances, in which case the transferees, pledgees or other successors-in-interest will be the selling beneficial
owners for purposes of this prospectus. Upon being notified by a Selling Securityholder that a donee, pledgee, transferee, other successor-in-interest
intends to sell our securities, we will, to the extent required, promptly file a supplement to this prospectus to name specifically such
person as a selling securityholder.
With respect to a particular offering of the securities
held by the Selling Securityholders, to the extent required, an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is part, will be prepared and will set forth the following information:
| ● | the
specific securities to be offered and sold; |
| ● | the
names of the selling securityholders; |
| ● | the
respective purchase prices and public offering prices, the proceeds to be received from the
sale, if any, and other material terms of the offering; |
| ● | settlement
of short sales entered into after the date of this prospectus; |
| ● | the
names of any participating agents, broker-dealers or underwriters; and |
| ● | any
applicable commissions, discounts, concessions and other items constituting compensation
from the selling securityholders. |
In connection with distributions of the securities
or otherwise, the Selling Securityholders may enter into hedging transactions with broker-dealers or other financial institutions. In
connection with such transactions, broker-dealers or other financial institutions may engage in short sales of the securities in the
course of hedging the positions they assume with Selling Securityholders. The Selling Securityholders may also sell the securities short
and redeliver the securities to close out such short positions. The Selling Securityholders may also enter into option or other transactions
with broker-dealers or other financial institutions which require the delivery to such broker-dealer or other financial institution of
securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction). The Selling Securityholders may also pledge securities to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other financial institution, may effect sales of the pledged
securities pursuant to this prospectus (as supplemented or amended to reflect such transaction).
In order to facilitate the offering of the securities,
any underwriters or agents, as the case may be, involved in the offering of such securities may engage in transactions that stabilize,
maintain or otherwise affect the price of our securities. Specifically, the underwriters or agents, as the case may be, may over-allot
in connection with the offering, creating a short position in our securities for their own account. In addition, to cover overallotments
or to stabilize the price of our securities, the underwriters or agents, as the case may be, may bid for, and purchase, such securities
in the open market. Finally, in any offering of securities through a syndicate of underwriters, the underwriting syndicate may reclaim
selling concessions allotted to an underwriter or a broker-dealer for distributing such securities in the offering if the syndicate repurchases
previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any
of these activities may stabilize or maintain the market price of the securities above independent market levels. The underwriters or
agents, as the case may be, are not required to engage in these activities, and may end any of these activities at any time.
The Selling Securityholders may solicit offers
to purchase the securities directly from, and it may sell such securities directly to, institutional investors or others. In this case,
no underwriters or agents would be involved. The terms of any of those sales, including the terms of any bidding or auction process,
if utilized, will be described in the applicable prospectus supplement.
It is possible that one or more underwriters may
make a market in our securities, but such underwriters will not be obligated to do so and may discontinue any market making at any time
without notice. We cannot give any assurance as to the liquidity of the trading market for our securities. Our shares of common stock
and warrants are currently listed on Nasdaq under the symbols “ADN” and “ADNWW”, respectively.
The Selling Securityholders may authorize underwriters,
broker-dealers or agents to solicit offers by certain purchasers to purchase the securities at the public offering price set forth in
the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future.
The contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set
forth any commissions we or the Selling Securityholders pay for solicitation of these contracts.
A Selling Securityholder may enter into derivative
transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered
by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities
pledged by any Selling Securityholder or borrowed from any Selling Securityholder or others to settle those sales or to close out any
related open borrowings of stock, and may use securities received from any Selling Securityholder in settlement of those derivatives
to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and will be identified
in the applicable prospectus supplement (or a post-effective amendment). In addition, any Selling Securityholder may otherwise loan or
pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus. Such
financial institution or other third party may transfer its economic short position to investors in our securities or in connection with
a concurrent offering of other securities.
In effecting sales, broker-dealers or agents engaged
by the Selling Securityholders may arrange for other broker-dealers to participate. Broker-dealers or agents may receive commissions,
discounts or concessions from the Selling Securityholders in amounts to be negotiated immediately prior to the sale.
In compliance with the guidelines of the Financial
Industry Regulatory Authority (“FINRA”), the aggregate maximum discount, commission, fees or other items constituting underwriting
compensation to be received by any FINRA member or independent broker-dealer will not exceed 8% of the gross proceeds of any offering
pursuant to this prospectus and any applicable prospectus supplement.
If at the time of any offering made under this
prospectus a member of FINRA participating in the offering has a “conflict of interest” as defined in FINRA Rule 5121 (“Rule
5121”), that offering will be conducted in accordance with the relevant provisions of Rule 5121.
To our knowledge, there are currently no plans,
arrangements or understandings between the Selling Securityholders and any broker-dealer or agent regarding the sale of the securities
by the Selling Securityholders. Upon our notification by a Selling Securityholder that any material arrangement has been entered into
with an underwriter or broker-dealer for the sale of securities through a block trade, special offering, exchange distribution, secondary
distribution or a purchase by an underwriter or broker-dealer, we will file, if required by applicable law or regulation, a supplement
to this prospectus pursuant to Rule 424(b) under the Securities Act disclosing certain material information relating to such underwriter
or broker-dealer and such offering.
Underwriters, broker-dealers or agents may facilitate
the marketing of an offering online directly or through one of their affiliates. In those cases, prospective investors may view offering
terms and a prospectus online and, depending upon the particular underwriter, broker-dealer or agent, place orders online or through
their financial advisors.
In offering the securities covered by this prospectus,
the Selling Securityholders and any underwriters, broker-dealers or agents who execute sales for the Selling Securityholders may be deemed
to be “underwriters” within the meaning of the Securities Act in connection with such sales. Any discounts, commissions,
concessions or profit they earn on any resale of those securities may be underwriting discounts and commissions under the Securities
Act.
The underwriters, broker-dealers and agents may
engage in transactions with us or the Selling Securityholders, or perform services for us or the Selling Securityholders, in the ordinary
course of business.
In order to comply with the securities laws of
certain states, if applicable, the securities must be sold in such jurisdictions only through registered or licensed brokers or dealers.
In addition, in certain states the securities may not be sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is available and is complied with.
The Selling Securityholders and any other persons
participating in the sale or distribution of the securities will be subject to applicable provisions of the Securities Act and the Exchange
Act, and the rules and regulations thereunder, including, without limitation, Regulation M. These provisions may restrict certain activities
of, and limit the timing of purchases and sales of any of the securities by, the Selling Securityholders or any other person, which limitations
may affect the marketability of the shares of the securities.
We will make copies of this prospectus available
to the Selling Securityholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The Selling
Securityholders may indemnify any agent, broker-dealer or underwriter that participates in transactions involving the sale of the securities
against certain liabilities, including liabilities arising under the Securities Act.
We have agreed to indemnify the Selling Securityholders
against certain liabilities, including certain liabilities under the Securities Act, the Exchange Act or other federal or state law.
Agents, broker-dealers and underwriters may be entitled to indemnification by us and the Selling Securityholders against certain civil
liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which the agents, broker-dealers
or underwriters may be required to make in respect thereof.